Clear Channel Issues $2 Billion of Bonds in Bank-Loan Exchange

Clear Channel Communications Inc.
issued $2 billion of bonds after the radio and billboard company
said its offer to exchange term loans for the new notes was
oversubscribed.

The 9 percent securities due in December 2019 yield 780
basis points more than similar-maturity Treasuries, according to
data compiled by Bloomberg. San Antonio-based Clear Channel said
Oct. 22 that more than $8 billion of loans were submitted for
exchange by the time the offer expired at the end of last week.

The so-called priority guarantee notes will be “fully and
unconditionally” backed by the parent company and all
“existing and future domestic wholly-owned restricted
subsidiaries,” the company said in an Oct. 12 statement. The
notes also will be secured by certain Clear Channel assets.

Clear Channel, controlled by Bain Capital Partners LLC and
Thomas H. Lee Partners LP after a 2008 buyout, received
permission from lenders this week allowing for the exchange of
as much as $5 billion of debt. The new notes were rated Caa1 by
Moody’s Investors Service, signaling the bonds are subject to
very high credit risk. Standard & Poor’s graded the debt an
equivalent CCC+.